Some comments from Prompt Payment BC survey respondents:

Payment delays are the most significant bottleneck in B.C.’s construction industry. These bottlenecks push risk down the construction chain which leads to fewer competitive bids on projects, higher costs, layoffs, and in the worst cases bankruptcy. Timely cash flow throughout the construction payment chain is fundamental to a healthy construction industry. Over 80% of work in the construction sector is completed by trade contractors and their employees. Their success and the health of their businesses is vital to the health of the sector as a whole and to the economy of British Columbia.

Our province needs a prompt payment solution that works for everyone including tradespeople, contractors, government, and taxpayers. The current situation sees delayed payments trickle down the chain creating both hardship and a serious reduction in efficiency in the construction industry. It also increases the cost to finance company operations and drives up the cost of construction overall. Between 2007 and 2012 the average duration of a receivable in Canada’s construction industry increased from 62.8 days to 71.1 days—an increase of over 13%. The impact of payment delay on small- and medium-sized enterprises can be disproportionately severe, and even a minor delay in payment of one or two invoices can put smaller businesses under severe financial stress.

Prompt Payment B.C. is dedicated to ensuring our province’s construction laws are fair for everyone in the industry. Prompt Payment legislation would keep more projects on-time and on-budget as we invest in infrastructure and build exceptional communities.

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Prompt Payment B.C. (PPBC) is a province-wide coalition of construction trade associations and trade contractors working to convince government to legislate a solution to payment delays in the construction sector.

Following successful efforts in other provinces and federally, PPBC is lobbying hard and promoting grassroots efforts that will make politicians understand the situation, pay attention and put a plan in place to solve the problem.

Our membership includes:

Payment delays are systemic in B.C.’s construction sector. It is a significant problem for small businesses, families, workers and taxpayers that could be addressed simply and at no cost.

Fixing the issue of payment delay will reduce delays on projects from industrial and commercial infrastructure to critical housing that is needed to meet the exceptional demand pressures in our province, which are felt most in the Lower Mainland.

When payments are delayed to contractors or suppliers at any level of the construction pyramid, critical processes break down, costs inflate, and there are severe consequences for people whose livelihoods depend on our industry. Trade contractors are especially hard hit by payment delays. They are expected to continue paying staff, funding benefit plans and other payroll obligations, purchase supplies, and continue work in progress even when revenue is delayed by days, weeks, or even months. The risk of late payment, which has increased significantly in recent years, makes it harder for contractors to make competitive bids, hire staff, invest in new capital equipment, and hire apprentices. Current pressures will lead to long-term challenges in the construction sector that our growing province cannot afford to bear. We need a prompt payment regime to ensure the stability of our construction sector.

The United Kingdom, Ireland, Australia, New Zealand, and the U.S. (including 49-of-50 states) have enacted some form of prompt payment legislation. In December 2017, Ontario became the first Canadian province to pass legislation to address payment delays after reforming its Construction and Lien Act. On January 30th, 2018, the federal government announced its intention to consult, draft, and pass legislation that would guarantee prompt payment and an adjudication system for federal government-owned projects. These are important steps and the B.C. government should show leadership to improve the health of our sector by following the frameworks set out in other jurisdictions.